To the classical liberal the current American usage of the word ‘liberal’ is a thing of pain. Any initiative to increase government spending is, of course, ‘liberal’; any expansion in government regulation of the economy is by the same usage ‘liberal’. In Capitalism and Freedom Friedman insisted on using ‘liberal’ as a classical liberal would. To no avail: the American usage that originated in the 1930s is stuck fast.
I am not concerned to persuade anyone to use the word ‘liberal’ as I should use it. But I do want to understand usages. My point here is that in the term ‘liberalism’ comprehends three different references.
‘Liberalism’ as an historical episode Historians use the term to describe polities originating in a reformist enlightenment project of post-ancient regime societies of 19th c Europe. This program was, politically, to establish a constitutional, national, parliamentary and impersonal state; economically, to abolish the mercantilist legacy of the early modern state, and any vestiges of medieval constraints on trade; and socially, to remove religion from public life.
Liberalism in this usage is more of an ‘event’, or episode, than a ‘thing’. It is more of an effect, than a cause, even though the effect, like an explosion, has serious effects itself. This 'liberalism' is singular and unique; and once gone, gone forever. The usage is obviously natural for historians, but frustrating to intellectual historians, since no great intellectual coherence can be expected from these episodes, being a matter of political equilibration rather than exercises in thought. ‘Liberal Italy’ ( from say1865 to 1922) was not terribly liberal.
‘Liberalism’ as a social philosophy Liberalism here is something that ‘grows’ or ‘develops’, rather than ‘happens’. Obviously, any social philosophy has a history itself, composed of event-like objects (as ‘logical positivism’ as an event in the history of positivism). And neither is outside political history. Thus, liberalism as a social philosophy may have originated, as Hayek believed, in a reaction to royal absolutism in 17th c Britain. But unlike 'liberalism as a historical episode' liberalism as social philosophy is dealing with questions that are almost outside history. A theory of fire may be dead and buried, but its reference is enduring.
‘Liberalism’ as a species of society This is liberalism as sociological phenomenon; a society of a particular nature. It is the type of society where the individual is the basic unit of society (as Daniel Bell puts it). This society is undeniably located "in history"; it is obviously tied up with the modern Europe. Benjamin Constant was capturing this in contrasting the Modern Liberty (of the individual) with the Ancient Liberty (of the polis). When more precisely, it began is a matter of disagreement; Oakeshott saw its germination in late medieval Italy; Rawls in the Reformation; Bell in the 17th century.
But unlike ‘liberalism as historical episode’ it is more like ‘state of matter’ than an event. So one might contend that England' ancien regime concluded in 1649, or one might mount the case for 1832; but no one sees any profit in dating the year of Britain's commencement as a liberal society. Unlike a ‘liberal age’ or ‘liberal philosophy’, 'liberal society' exists as a matter of degree. Societies are more or less liberal. There will always some degree of accommodation of liberal values; some pocket where they may be strong even in the face of illiberal sway in other parts. Historically, the economy is, of course, where liberal society is strongest.
This matter of degree is best not seen as a matter of content. There is "legacy liberalism", such as Australian Federalism; something bequeathed by an earlier period, but with which current society has no sympathy for. The degree of liberalism, then, is best measured resilience of liberalism in the presence of shocks, and growth in their absence. This growth and resilience is fostered by the support of other social dynamics support it; when liberalism manages to engulf, or at least permeate, the domains of polity and community.
Which brings us back to the United States. It is - for better or ill – a deeply liberal society. Everyone in the United States is a liberal in the classical liberal sense, no more so than those oh-so-conservative Tea Partiers (which, recall, keep away from the one thing that might have diistinguished them from classical liberals - social policy). Socialism is an extinct fauna in the American ecosphere; and even the left that survives has never been tied at the hip to labourism, as it has in the rest of the anglosphere. The state is utterly liberalized; more democratised, federalized, constitutionalised, checked and balanced, sunset-claused, porous, transparent – and less possessed of agency – than any other state. And that, I suspect, has allowed the word ‘liberal’ to seep over to favour a prerogative in state action that in less liberal societies would be rightly deemed an offence to liberalism.